Latest news with #ZiadAlMurshed
Argaam
6 days ago
- Business
- Argaam
Aramco resilient despite volatility thanks to low costs, financial strength: CEO
Saudi Arabian Oil Co. (Saudi Aramco) has demonstrated strong operational resilience despite the recent market volatility, supported by a low-cost structure, strong financial position, and disciplined execution. Addressing the H1 2025 earnings call attended by Argaam, Nasser said Aramco's adjusted net income reached $50.9 billion, with free cash flow at $34.4 billion, maintaining a robust performance in the face of global turmoil. Additionally, the Saudi oil giant's net debt stood at 6.5%, while return on capital employed hit 19%, according to the top executive. He also pointed out that global oil demand averaged 105.3 million barrels per day (bpd) from January through August. The rate is expected to continue growing and rise by more than 2% in the second half of this year, driven by seasonal factors and improving economic activity in China and the US. Separately, global inventories remain tight at 3.6 billion barrels, supporting continued demand momentum through 2025, the CEO further stated. Aramco maintained 100% reliability in crude and product deliveries in H1 2025, with the second-quarter production amounting to 12.8 million barrels of oil equivalent per day (boe/d), up by 475,000 boe/d from Q1 2025. Executive VP and CFO Ziad Al-Murshed said Aramco achieved $3.5 billion in operational savings through SABIC integration, with ongoing portfolio restructuring across the group amid industry overcapacity. Aramco continues to shift capital from low-return assets to higher-yielding opportunities, including infrastructure projects that have drawn investor interest despite modest returns. Al-Murshed added that Aramco expanded its retail footprint with 250 new branded stations since 2024, and maintained H1 2025 capex at $25.5 billion, in line with its full-year target of $52-58 billion. At present, the Saudi oil giant is exploring multi-currency bond issuances, domestic sukuk, and secured export credit financing to support strategic growth, he underlined.
CTV News
6 days ago
- Business
- CTV News
Saudi Aramco profit drops as it flags cost cuts, divestments
Saudi Aramco engineers at Khurais oil field during a tour for journalists, on June 28, 2021. (Amr Nabil / AP) DUBAI — Saudi Arabian oil company Aramco reported a 22 per cent drop in second-quarter profit on Tuesday, and the world's top oil exporter said it was cutting costs and looking to divest assets as crude prices drop and its debt mounts. The firm's generous dividends, a key source of funding for ambitious plans to cut the kingdom's reliance on oil, will be about a third lower this year. Aramco reported its 10th decline in quarterly net profit to US$22.7 billion in the quarter through June, from US$29.1 billion a year earlier. Aramco's shares were up 0.3 per cent at 23.98 riyals. They have dropped about 14.5 per cent this year, trailing industry peers. Adjusted net income fell 13.7 per cent to US$24.5 billion, above a company-provided median analyst estimate of US$23.7 billion. 'What we're looking at across the portfolio is to unlock capital that is currently locked into low - relatively low-return (assets) ... invest it in our core investment, which are high return,' CFO Ziad Al-Murshed told reporters. He declined to name the assets, but said: 'it is your typical low-return that is tied in things like infrastructure.' Reuters reported last month that Aramco was close to a deal to raise US$10 billion from a group led by BlackRock, and is considering selling up to five gas-powered power plants to raise up to US$4 billion. Total borrowing rose to US$92.9 billion at June 30 from US$74.4 a year prior. Gearing, a measure of indebtedness, rose to 6.5 per cent from minus 0.3 per cent a year earlier and 5.3 per cent the previous quarter. Aramco is looking at different geographies, currencies and instruments for debt issuance, Al-Murshed said. The company, long a reliable source of revenue for the Saudi state, confirmed a previously outlined US$21.3 billion in total dividends for the second quarter, about US$200 million of which is performance-linked dividends. Dividends sink Aramco in March outlined total dividends of US$85.4 billion for 2025 - a 31 per cent drop from more than US$124 billion the previous year. The performance-linked component is set to plunge 98 per cent from 2024 to US$900 million as free cash flow dwindles. Free cash flow dropped nearly a fifth year-on-year in the second quarter to US$15.2 billion. For the Saudi government, which owns 81.5 per cent of Aramco shares directly and another 16 per cent through its sovereign wealth fund PIF, dividends are a critical source of income, particularly as it invests to diversify the economy away from oil. Oil generated 62 per cent of the government's revenue last year, and the International Monetary fund estimates the kingdom needs oil prices at more than US$90 a barrel to balance its 2025 budget. Aramco's average realized crude oil price was US$66.7 a barrel in the quarter, down from US$76.3 in the first quarter and US$85.7 in the second quarter of 2024. 'We've penciled in for Saudi Arabia to run a budget deficit of 5.0 per cent of GDP this year,' said James Swanston, senior economist at Capital Economics, adding the government would likely overshoot its annual borrowing plan. That would be more than double the 2.3 per cent deficit, or about US$27 billion, the kingdom projected in November for the 2025 budget. --- Reporting by Yousef Saba and Luke Tyson in Dubai; Editing by Mark Potter and Bernadette Baum
Reuters
6 days ago
- Business
- Reuters
Saudi Aramco profit drops as it flags cost cuts, divestments
DUBAI, Aug 5 (Reuters) - Saudi Arabian oil company Aramco ( opens new tab reported a 22% drop in second-quarter profit on Tuesday, and the world's top oil exporter said it was cutting costs and looking to divest assets as crude prices drop and its debt mounts. The firm's generous dividends, a key source of funding for ambitious plans to cut the kingdom's reliance on oil, will be about a third lower this year Aramco reported its 10th decline in quarterly net profit to $22.7 billion in the three months ended June 30, from $29.1 billion a year earlier. Adjusted net income fell 13.7% to $24.5 billion, above a company-provided median analyst estimate of $23.7 billion. "What we're looking at across the portfolio is to unlock capital that is currently locked into low - relatively low-return (assets) ... invest it in our core investment, which are high return," CFO Ziad Al-Murshed told reporters. He declined to name the assets, but said: "it is your typical low-return that is tied in things like infrastructure." Reuters reported last month that Aramco was close to a deal to raise $10 billion from a group led by BlackRock, and is considering selling up to five gas-powered power plants to raise up to $4 billion. Aramco's average realised crude oil price was $66.7 a barrel in the quarter, down from $85.7 in the second quarter of 2024 and $76.3 in the first quarter of this year. Total borrowing rose to $92.9 billion at June 30 from $74.4 a year prior. Gearing, a measure of indebtedness, rose to 6.5% from minus 0.3% a year earlier and 5.3% the previous quarter. The company, long a reliable source of revenue for the Saudi state, confirmed a previously outlined $21.3 billion in total dividends for the second quarter, about $200 million of which is performance-linked dividends. Aramco in March outlined total dividends of $85.4 billion for 2025 - a 31% drop from more than $124 billion the previous year. The performance-linked component is set to plunge 98% from 2024 to $900 million as the company's free cash flow dwindles. Free cash flow dropped nearly a fifth year-on-year in the second quarter to $15.2 billion. For the Saudi government, which owns 81.5% of Aramco shares directly and another 16% through its sovereign wealth fund PIF, dividends are a critical source of income, particularly as it invests to diversify the economy away from oil. Oil generated 62% of the government's revenue last year. The International Monetary fund estimates the kingdom needs oil prices at more than $90 a barrel to balance its 2025 budget. Global crude benchmark Brent was trading at $68.83 on Tuesday. "We've pencilled in for Saudi Arabia to run a budget deficit of 5.0% of GDP this year," said James Swanston, senior economist at Capital Economics, adding the government would likely overshoot its annual borrowing plan. That would be more than double the 2.3%, or about $27 billion, deficit the kingdom projected in November for the 2025 budget.
Arab News
03-06-2025
- Business
- Arab News
Saudi Aramco secures $5bn in bond sale to bolster financial flexibility
RIYADH: Saudi Aramco has raised $5 billion through a three-tranche bond issuance under its Global Medium-Term Note Program, the company said. The senior notes, which were priced on May 27 and listed on the London Stock Exchange, include $1.5 billion maturing in 2030 at a 4.75 percent coupon, $1.25 billion maturing in 2035 at 5.375 percent, and $2.25 billion maturing in 2055 with a 6.375 percent coupon. This follows Aramco's $6 billion bond sale in July 2024 and comes amid heightened Gulf debt market activity, including Saudi Arabia's Public Investment Fund, which has raised $5.25 billion so far in 2025 through multiple issuances — including a $4 billion bond in January — and Abu Dhabi's Masdar, which recently issued a $1 billion green bond. Ziad Al-Murshed, executive vice president of finance and chief financial officer at Aramco, said: 'The strong demand for our new bond offering, as reflected in the diversified orderbook, is a testament to global investors' confidence in Aramco's financial resilience and robust balance sheet.' He added: 'Pricing the offering with no new issuance premium across all tranches clearly reflects Aramco's unique long-term credit proposition.' The bond offering saw tightened spreads across all maturities, indicating strong investor interest. The five-year notes were priced at 80 basis points over US Treasuries, while the 10- and 30-year tranches were set at 95 and 155 basis points respectively — each tighter than initial price guidance earlier in the day. Proceeds from the latest issue will be used for general corporate purposes, as the state oil giant continues to support Saudi Arabia's Vision 2030 diversification strategy. The issuance comes as Aramco navigates a more challenging environment marked by declining profits and lower crude prices. The company reported a 4.6 percent drop in first quarter earnings, citing weaker sales and rising operating costs. In March, it announced plans to cut its dividend by nearly a third due to declining free cash flow. Amid these headwinds, Aramco is also exploring asset sales and capital market strategies to maintain liquidity and finance its global expansion ambitions. In May, the company published a new prospectus for a sukuk issuance program, signaling potential future activity in debt markets. The sukuk, also to be listed on the London Stock Exchange, may be issued over the next 12 months. Meanwhile, Masdar — Abu Dhabi's renewable energy company — also returned to the debt market in May with a $1 billion green bond issuance. The deal was split into two equal tranches of $500 million each, with maturities of five and ten years and coupon rates of 4.875 percent and 5.375 percent, respectively. The bond was significantly oversubscribed, receiving $6.6 billion in peak orders, which highlights the growing global appetite for sustainable investment instruments.
Gulf Business
03-06-2025
- Business
- Gulf Business
Saudi Arabian Oil Company Aramco completes $5bn bond issuance
Image credit: Saudi Aramco Saudi Arabian Oil Company (Saudi Aramco) has announced the completion of a $5bn issuance of bonds across three tranches under its Global Medium Term Note Program. Read- According to Aramco, the tranches include $1.5bn in senior notes maturing in 2030 with a coupon rate of 4.7 per cent, $1.25bn in senior notes maturing in 2035 with a coupon rate of 5.3 per cent, and $2.25bn in senior notes maturing in 2055 with a coupon rate of 6.3 per cent. The transaction was priced on May 27, 2025, and the notes were listed on the London Stock Exchange, a Saudi Press Agency report said. 'The strong demand for our new bond offering, as reflected in the diversified orderbook, is a testament to global investors' confidence in Aramco's financial resilience and robust balance sheet. Pricing the offering with no new issuance premium across all tranches clearly reflects Aramco's unique long-term credit proposition. We remain committed to our disciplined approach towards capital management as we continue to execute our growth strategy,' Aramco's Executive Vice President of Finance and CFO Ziad Al Murshed stated.
